(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
Our main concern with the provision of benefits derived from
transfer payments has always been that the tax-free lump sum
element should be no more than was justified under the rules of the
transferring scheme. Until the issue of Memorandum No 104, it was
our practice that the receiving scheme should obtain a certificate
from the transferring scheme in all cases stating the maximum lump
sum benefit that could be paid from the transfer payment.
Our discretionary requirements in relation to transfer
payments to and from occupational pension schemes changed upon the
issue of Memorandum 104. From March 1991 it became a condition of
approval or continued approval that transfers are dealt with in
accordance with the following paragraphs. Schemes approved prior to
that time were expected to comply and to change their rules at the
earliest suitable opportunity. Schemes considered for approval from
that time must include provisions reflecting the following
paragraphs in their rules if they are to be approved.
